Financial Year 2019 Results

Investor presentation

21 May 2019

1. FY19 Summary

2. FY19 Financial results

Agenda

3. FY20 Outlook

2

4. Q&A

5. Appendix

33

Skander MalcolmChief Executive Officer and Managing Director

FY19 Summary

44

Strong operating result

4

8.0%

Results underpinned by good fundamentals

• Underlying EBITDA1 ahead of range due to strong March, with better than expected

margins and benefits of cost actions

• Transactions increased 8.8% and transactions per active client2 up 12.6%

• Annual positive operating leverage with good cost controls

• Cash generation for own use of $19.0m

• Underlying return on invested capital 4 (ROIC) of 36.3%

NOI

$118.7m

Underlying

EBITDA 1

$32.2m

Final

dividend

3.28c

per share

8.1%

1. Excluding corporate action costs of $4.3m

2. Active clients are numbers of clients who have transacted at least once in the prior 12 months

3. Revenue represents “Fee and trading income” in the statutory accounts

4. ROIC represents Underlying NOPAT / Invested Capital. Invested Capital = shareholders equity less cash held for own use plus collateral, working capital and fixed assets being property, plant and equipment and intangibles

Continued revenue3 growth

• Strong momentum in North America

and Asia, up 19.8% and 19.3%

respectively, and Australia up 5.1%

• Corporate growth of over 10% in all

regions

• Stable NOI margin (ex IPS) of 55bps

Enhanced client experience

• Growth in NPS to 67 from 60

• Delivered new mobile application

and website

• Improved functionality for global

currency account API offering

55

Good execution in a soft market

Source: OFX analysis and https://www.thomsonreuters.com/en/resources/fx-volumes.html

1. Indexed to base of 100 from 4Q18

Indexed1 OFX FY19 NOI vs Thompson Reuters FX volumes ($bn)

OFX consistently outperforms market volumesConsistent NOI growth despite a lower market -

2H19 total market spot volume down (8)%

Thompson Reuters average daily FX volumes ($bn)

Month Market OFX Var

Index start 100 100 -

1Q19 95 106 +11

2Q19 88 105 +18

3Q19 84 103 +19

4Q19 86 105 +19

265 273 273

326 311

286 274 279

0

50

100

150

200

250

300

350

1Q 2Q 3Q 4Q

FY18 FY19OFX NOI

growth

17.4% 4.8% 0.4% (14.4%)Market

growth

13.0% 10.3% 4.2% 4.9%

5

6

Active client engagement increasing

Transactions

1,049k8.8% up on FY18

ATV

$22.6k2.8% up on FY18

Turnover

$23.7b11.9% up on FY18

Active clients

156.5kdown 3.3% from

31-Mar-18

Decline in active clients

but increasing lifetime

value…

Continue to attract high

ATV clients…

Client value increases

turnover across the group

Transactions per active client

6.7Up 12.6% from

31-Mar-18

Driven by increasing

client engagement…

LTM = Last twelve months

Transactions per active

client (LTM)

Active clients (‘000) Transactions (‘000) Average transaction

value ($’000)

Turnover ($b)

6

Strong growth in

transaction volumes …

ATV = Average transaction value

-

20

40

60

80

100

120

140

160

1H

18

2H

18

1H

19

2H

19

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1H

18

2H

18

1H

19

2H

19

0

100

200

300

400

500

600

1H

18

2H

18

1H

19

2H

19

IPS (International Payment solutions)

-

5.0

10.0

15.0

20.0

25.0

1H

18

2H

18

1H

19

2H

19

-

2

4

6

8

10

12

14

1H

18

2H

18

1H

19

2H

19

77

FY17 FY18 FY19

Expanding our lifetime revenue

Growing the lifetime revenue of our clients1

1. Discounted lifetime revenue of existing clients in the portfolio. This represents all registered clients that have the ability to transact

• Very clear targeting of high value consumers

• Strong digital experience:

✓ updated mobile app

✓ new website in all regions

✓ digital KYC refresh

✓ significantly improved North American experience

• Human service delivery, NPS grew 13%

• Targeting clear and specific use cases

• Enhanced digital client experience

• Investment in sales operations globally:

✓ harmonised pipeline management

✓ quarterly pricing reviews

✓ improved portfolio reporting

• Strong corporate NPS, up 10%, valuable personal service

• Implemented multiple GCA improvements

Consumer

Corporate

IPS

Corporate

Consumer

156.7k 161.9k 156.5kActive

Clients

69% 72% 76%Recurring

revenue

• Investment in:

✓ improved API portal

✓ enhanced risk management

✓ active account management

• Building the enterprise pipeline

Enterprise

7

8

Diverse revenue growth, strong global platform

A&NZ

Asia

Europe

North America

Turnover + 11.9%

Transactions + 1.7%

Turnover + 12.7%

Transactions + 47.4%

Turnover + 0.8%

Transactions + 6.0%

Turnover + 17.0%

Transactions + 22.5%

8

• Excludes IPS

• Turnover and transactions represent annual growth from FY18 to FY19

1H

18

2H

18

1H

19

2H

19

1H

18

2H

18

1H

19

2H

19

1H

18

2H

18

1H

19

2H

19

1H

18

2H

18

1H

19

2H

19

Revenue

Revenue

Revenue

Revenue

99

Selena VerthChief Financial Officer

FY19 Financial results

1010

FY19 financial results

1. Excluding corporate action costs of $4.3m

2. 4k invalid registrations have been removed in FY18

3. Active clients are clients who have transacted at lease once in the prior 12 months

4. Total cash held for own use includes deposits with financial institutions

FY18 FY19 Var %

Financial Metrics

Fee and trading income ($m) 119.0 128.7 8.2%

Net operating income ($m) 109.9 118.7 8.0%

Underlying Operating expenses1 ($m) (80.1) (86.5) 8.0%

Underlying EBITDA1 ($m) 29.8 32.2 8.1%

Underlying EBT1 ($m) 24.9 26.4 6.0%

Statutory NPAT ($m) 18.7 17.6 (5.8%)

Total cash held for own use4 57.5 58.6 1.9%

Operational Metrics

Registrations2 (‘000s) 145.4 139.6 (4.0%)

Active clients3 (000’s) 161.9 156.5 (3.3%)

Turnover ($b) 21.2 23.7 11.9%

Transactions (000’s) 963.7 1048.7 8.8%

Average transaction value (000’s) 22.0 22.6 2.8%

Financial resultsHeathy financial indicators

• Lead revenue indicators:

– Growth in turnover and transactions

– NOI margin (excluding IPS) stable at 55bps

– Increasing transactions per client

– Corporate registration growth of 12.2%

• Investing for growth, revenue generating expenses grew 3x revenue

enabling expenses

• Effective tax rate including corporate action costs decreased to 20%

due to R&D lower offshore taxes, future tax rate expected to be 25%

• Statutory NPAT decreased 5.8%, due to corporate action costs of

$4.3m. Underlying NPAT increased 12.2% to $21.0m

• Strong cash generation, cash held for own use of $58.6m

• Final dividend of 3.28c per share

11

Delivered annual positive operating leverage

$m FY18 FY19 Var %

Employee expense (46.1) (50.3) 9.0%

Promotional expense (16.1) (17.6) 8.8%

Technology infrastructure (5.2) (5.1) (0.8%)

Occupancy expense (4.0) (4.4) 10.2%

Other expense (8.7) (9.1) 5.5%

Underlying operating expenses (80.1) (86.5) 8.0%

Underlying operating expenses 1

11

Improved cost management and visibility

• Employee average FTEs increased 8.6%, with revenue generating

FTEs increasing by 10%

• Promotional expense – market spot volumes fell 8% in 2H19 driving

15% lower consumer promotional spend

• Technology infrastructure – flat expense whilst transactions up 8.8%

• Occupancy expense - investment in Sydney, London and Singapore

capacity

1. Excluding corporate action costs of $4.3m

FY20 expectations

• Pivot to Corporate increasing employee expense and a shift in mix

for promotional expense

• Technology infrastructure will increase as we invest in SaaS

initiatives including treasury management and transaction monitoring

• Occupancy expense – full year of increased capacity

Underlying operating

expenses1

Net operating income

Underlying

EBITDA

+8.1%

Underlying positive operating leverage

12

Infrastructure investment 1 of $7.7m, driving growth

12

Client

experience

Reliable,

scalable

systems

• Website

• Mobile application

• North America

• Global Currency Account

• Developer portal and rates API

• Treasury management

• Transaction monitoring

• Pricing

• Registration completion rate from app up 2x

• NPS up to 67 from 60, every region up 10%+

• Enhanced rate feed to new and existing partners

• Pricing improvements increased consumer margins

by 3bps

• Best ever regulatory and bank review outcomes

• 7 federal / state regulatory reviews, 12 bank

compliance reviews and 5 AML audits

• Reduced banking costs by 1.6% per transaction

Investments Impact

1. Infrastructure investment of $7.7m represents intangible assets only

13

No debt, strong cash flow and high returns

$m 31-Mar-18 31-Mar-19

Assets

Cash held for own use 47.3 26.1

Deposits with financial institutions 10.2 32.5

Cash held for settlement of client liabilities 155.8 155.2

Derivative financial assets 12.9 9.1

Other assets 4.8 6.9

Property, plant and equipment 3.9 3.2

Intangible assets 7.2 11.0

Deferred and prepaid tax assets 0.2 3.0

Total assets 242.3 247.0

Client liabilities 156.9 157.2

Derivative financial liabilities 10.7 6.4

Other liabilities 11.7 12.0

Total liabilities 179.3 175.6

Total equity 63.0 71.4

13

Cash held for own use FY19 vs. FY18

• Cash held for own use including deposits with financial institutions, $58.6m,

up 1.9% from $57.5m as at 31 March 2018

• Final dividend of 3.28c per share will be paid out of free cash flow

• Future dividends expected to be franked at 70%

• Invested $8.9m in capex from own cash generation

Underlying

EBITDA

Change in

balance

sheet items

and reserves

(exc. Tax)

Capital

expenditure

Tax

payments

Change

in forward

book

Cash

generated

for own use

Dividends

paid

Corporate

action costs

Net cash

generated

for own use

$32.2m

$19.0m

$1.1m

-$4.3m

-$13.6m+$0.5m

-$7.9m

-$8.9m+$4.1m

14

FY20 outlook

Skander MalcolmChief Executive Officer and Managing Director

15

FY20 – Focus areas

15

• Continued strong investment in North

America and Asia

• Grow UK Corporate

• Build momentum in A&NZ

• Substantially improve corporate

client onboarding

• Deploy corporate CRM

• Scale pricing improvements

• Secure substantial commercial or

enterprise opportunities

• Continue to grow enterprise pipeline

• Invest in enterprise capabilities

through API

• Continue to optimise our reliable,

scalable systems

• Reduce unit cost of payments,

banking, treasury and service

delivery

• Integrating to improve operational

risk execution

• Grow investment in cyber security

and risk

• Stronger regional teams

• Invest in world class commercial

and marketing capabilities

Foundational Enablers

Growth drivers

Client Experience Geographic Expansion Partnerships

Risk ManagementReliable, scalable

systemsPeople

1616

OFX - provider of choice for Corporate clients:

• Build and deploy value propositions in corporate to chosen client segments, and communicate our differentiators

• Increase investment in direct marketing channels, and sales people

• Improve sales efficiency via sales operations model and account management process

• Grow investment in industry events and lead generation activities, and quality

Corporate Client Teams

Account Management

Financial Insights

Lead Generation

Sales Operations

Digital Marketing

OFX Business

Team

Grow investment in corporate marketing & sales

16

Global Currency Account – transferred $2.7b in first 3 years

Scalable foundations

Reduced operational

unit economic costs,

over 80% automated

scalable payments

Improved Platform

Launched new client

experience offering

multi-language report,

external integrations

and features to

address the Chinese

market

High Growth

GCA revenue

increased by 35%

compared to previous

year and over 100%

increase in new clients

on FY18

Transferred over $1bn

through the Global

Currency Account

Platform in FY19

FY19 highlights

What’s next in FY20

• 3rd Party integration to GCA

• Expanding payment

capabilities

• Exploration on additional high

value use cases

• Expanding currency accounts

17

18

FY20 – Summary outlook

18

Annual positive operating

leverage on an EBITDA basis

Maintain stable NOI margins

Capex investment stable, pre-

enterprise investments

Financial commitments

Growth drivers

Increase investment in APIs to

support enterprise clients and

substantially invest in corporate

onboarding

Increase investment in corporate

sales and marketing

Continue to invest in North America,

Asia and UK corporate

Accelerate

corporate growth

Client

Experience

Geographic

Expansion

1919

Q&A

OFX Group Limited (ABN 12 165 602 273)

Level 19, 60 Margaret Street, Sydney NSW 2000 Australia. www.ofx.com

The material contained in this document is a presentation of general information about OFX Group Limited (Company) and its activities current as at 21 May 2019. Material is provided in summary only and

does not purport to be complete. The material contained in this document has been prepared without taking into account the investment objectives, financial situation and particular needs of any particular

person and should not be taken as advice for investment purposes or a recommendation in relation to the Company.

Certain statements in this document relate to the future, including estimates, projections and opinions. Such statements involve known and unknown risks and uncertainties and other important factors that

could cause the actual results, performance or achievements to be materially different from expected future results, performance or achievements expressed or implied by those statements. Many of these

factors are beyond the Company’s control, and the Company does not give any warranty, express or implied, representation, assurance or guarantee that the events expressed or implied in any forward

looking statements will occur or will prove to be correct, and you are cautioned not to place reliance on such forward looking statements. Subject to applicable disclosure requirements, the Company

undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of publication of this document. Past performance information is given for illustrative

purposes only and is not an indication of future performance.

The Company makes no warranty, expressed or implied, concerning the accuracy, reliability, adequacy or completeness of the information and opinions contained in this document. To the maximum extent

permitted by law, no responsibility for any direct or indirect or consequential loss arising in any way (including by way of fault or negligence) from anyone acting or refraining from acting as a result of

reliance on the material in this document is accepted by the Company or any of its related bodies corporate, affiliates, directors, employees, officers, partners, agents and advisers or any other person

involved in the preparation of this document.

This document has not been subject to external auditor review.

20

21

Appendix

2222

Lower volatility in FY19 vs. FY18

22

14 day moving average of daily % movement in spot price (AUD/USD)1

31

-Ma

r

Daily volatility outside bands 1H 2H

Volatility +/- 15 bps Days

FY18 21 36

FY19 30 25

-0.300%

-0.200%

-0.100%

0.000%

0.100%

0.200%

0.300%

0.400%

1-A

pr

6-A

pr

11

-Apr

16

-Apr

21

-Apr

26

-Apr

1-M

ay

6-M

ay

11

-Ma

y

16

-Ma

y

21

-Ma

y

26

-Ma

y

31

-Ma

y

5-J

un

10

-Ju

n

15

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5-J

ul

10

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4-A

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9-A

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14

-Aug

19

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24

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29

-Aug

3-S

ep

8-S

ep

13

-Sep

18

-Sep

23

-Sep

28

-Sep

3-O

ct

8-O

ct

13

-Oct

18

-Oct

23

-Oct

28

-Oct

2-N

ov

7-N

ov

12

-Nov

17

-Nov

22

-Nov

27

-Nov

2-D

ec

7-D

ec

12

-Dec

17

-Dec

22

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c

27

-Dec

1-J

an

6-J

an

11

-Ja

n

16

-Ja

n

21

-Ja

n

26

-Ja

n

31

-Ja

n

5-F

eb

10

-Fe

b

15

-Fe

b

20

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25

-Fe

b

2-M

ar

7-M

ar

12

-Ma

r

17

-Ma

r

22

-Ma

r

27

-Ma

r

FY18 FY19

15bps

(15bps)

1. Represents the 14 day moving average of daily % movement in spot price. AUD/USD is a major trading corridor

23

Strong recurring revenue

Active Clients at

31-Mar-19

156.5kDown 3.3% from 31-Mar-18

Corporate revenue $m

Consumer revenue $m

Returning

clients

76%

23

New clients

24% Up from 72% in

FY18

New Clients

Returning clients

0

5

10

15

20

25

30

35

40

1H

15

2H

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